Transport and Tourism Marketing Lecture Number: 9

Learning Objectives• Appreciate importance and complexity of

transport marketing in relation to tourism. • Understand and explain the differences and

similarities between treating transport as a service and as a product.

• Recognize that transport marketing can often involve the marketing of destinations.

• Appreciate various forms of strategic marketing in transport

• Understand how service quality is assessed in transport operations.

Introduction

• Marketing of transport is critical to the overall development and power of attractions, destinations and countries.

Marketing: Relationships to Transport

• Tourism is comprised of multiple sectors. • Each of these sectors features core, tangible

and augmented tourism products. • For example; core product of an airline is

transport, and basic need function is to transport customers from point to point.

• Tangible products include, airline name, lounges, quality of in-flight service and comfort of seats.

• Tangible products are, specific features and benefits residing in product itself; styling, quality, brand name and design.

• Some tangible elements may not be part of decision-set criteria when selecting an airline. (e.g. collect points towards future air travel).

• Aviation industry’s product is intangible and cannot be stored.

• Core product of many cruise operations is not transport, but rather service & amenities relating to the experience on offer.

Packaging

• “Passenger transport bundles”, comprised of:Service availability & convenienceCost in comparison with competitors on same routesDesign & performance of vehicle (comfort & speed)Comfort, seating, ambience & any services offered

during the journeyPassenger handling at terminals & car parksConvenience of booking & ticketing arrangementsContact with staff and their roles in contact with

customers Image & positioning of each operator

Product or Service? Positioning Tourism Transport

• Involves examining the concepts of:1. Tangibility. Products are often physical entities;

one is able to handle and inspect them before purchase. Services cannot be directly handled, but they can be inspected. Services are therefore intangible.

2. Separability. Services are consumed and produced at the same time. Journey is happening as you experience it, production & consumption of transport is, inseparable.

3. Perishability. Transport cannot be stored or carried forward for consumption at a later date. Empty seats or berths represent lost revenue.

4. Heterogeneity. Services are difficult to standardize simply because they are fluid offerings that differ from one encounter to the next due to variable nature of human behavior.

Strategic Marketing in Tourism Transport1.Market Penetration Strategies

• A typical market penetration strategy dicates that an organization seek to gain greater dominance in a market in which it already has an offering, achieving this through promotion or advertising & increasing brand recognition.

• Price-based promotions are the most popular form of promotions in travel and tourism.

• This is because the use of specific modes of transport is elastic; that is, the higher the cost of transport, the less likely a customer is to utilize that mode of transport.

“Segmenting the Market”

• Segmentation is the process of portioning markets into segments of potential customers with similar characteristics & similar purchase behavior.

• Segmentation, is a powerful means by which firms come to know their market and excel in a highly competitive market.

• For example; leisure travelers seek more cheaper fares.

Strategic Marketing in Tourism Transport2.Market Development Strategies

• Involve attempts at securing market share in markets not currently being served. (enter new markets).

• For example; “Ryanair” paid lower commissions to travel agents, preferring instead to sell seats to customers through its website.

Strategic Marketing in Tourism Transport3.Product Development Strategies

• Involve introduction of new products to existing market segments.

• Focus is on recognition of a need for new offerings.

• Such strategies have been prevalent in cruise tourism with the increase in global competition.

• Cruise ships now feature a range of on-board amenities designed to appeal to numerous market segments.

“Alliances as marketing tools”

• It has significant benefits for marketing because it allows airlines to tap into new markets that would have necessitated the introduction of their own services and, therefore, consuming substantial amounts of capital investment.

Service Quality consideration in Transport and Tourism

• Regardless of transport is considered a product or a service, the quality of delivery must be considered.

• In transport research, attention to the issue of service quality and how it is to be measured.

• In air transport, service quality has been examined with respect to the impact it can have on passenger behavior & safety perceptions.

• Important relationship between service quality and airline market share utilizing a weighted average of on-time performance, over-sales, mishandled baggage and in-flight food quality when measuring an air carrier’s overall attractiveness.

• If an airline’s service quality falls below the market reference point, airline’s market share will decrease gradually, but service increase from reference point may not increase an airline’s market share.

• One of the more popular measures of service quality is the gap method, this method measured the difference between customer’s exception and perceptions.

A list of service dimensions:

1. Tangibles, including facilities & buildings2. Reliability, ability of service to be performed 3. Responsiveness, or ability of organization or

service provider to respond to customer needs4. Assurance, or extent to which staff give

confidence & trust5. Empathy, which refers to ability of organization

to be caring

Service encounter in context of transport and tourism can occur at several points:

1. Pre-travel interactions between traveler and transport provider, including booking.

2. During travel, including customer evaluation and experience of core products & services.

3. Post-travel, including quality post-sales service & attention. (e.g. lost baggage).

Text book

• Duval D. (2007). Tourism and Transport: Modes, Networks and Flows. Multilingual Matters & Channel View Publications. (Chapter 8)